BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 467|
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THIRD READING
Bill No: SB 467
Author: Pavley (D)
Amended: 5/31/11
Vote: 21
SENATE GOVERN. ORGANIZATION COMMITTEE : 11-1, 4/26/11
AYES: Wright, Berryhill, Cannella, Corbett, De Le�n,
Evans, Hernandez, Padilla, Strickland, Wyland, Yee
NOES: Anderson
NO VOTE RECORDED: Calderon
SENATE APPROPRIATIONS COMMITTEE : 6-2, 5/26/11
AYES: Kehoe, Alquist, Lieu, Pavley, Price, Steinberg
NOES: Walters, Runner
NO VOTE RECORDED: Emmerson
SUBJECT : Department of General Services: contracts
SOURCE : Author
DIGEST : This bill provides that under certain
conditions, a contract for energy efficiency products or
services shall be regarded by the Department of General
Services (DGS) as a no-cost or net-neutral contract, and
requires DGS to issue a non-mandatory master services
agreement for procurement of energy efficiency products or
services by state agencies.
ANALYSIS :
CONTINUED
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Existing law:
1. Authorizes the Public Works Board to acquire and
construct public
buildings for use by state agencies when authorized by a
separate act or appropriation enacted by the
Legislature.
2. Requires new public buildings to be designed,
constructed, and equipped with all energy efficiency
measures, materials, and devices that are feasible and
cost-effective over the life of the building or the life
of the energy efficiency measure, whichever is less.
3. States that existing public buildings, when renovated or
remodeled, shall be retrofitted to meet specified energy
efficiency standards.
4. Requires DGS to review and adopt revisions to its
standard leases that are designed to maximize energy
savings in buildings leased by the state.
5. Authorizes DGS to consolidate the needs of state
agencies for goods and services and establish master
agreements that leverage the state's buying power for
acquisition of goods and services. State and local
agencies may contract with suppliers awarded those
contracts without further competitive bidding.
This bill:
1. Defines an "energy efficiency product or service" as a
technology or technology service where the energy cost
savings to the state are projected to exceed the
compensation the state pays for the technology or
service within 36 months of the initial deployment of
the product or service.
2. Directs DGS to deem a contract for an "energy efficiency
product or service" to be a no-cost or net-neutral cost
contract if the contract is financed by either of the
following methods:
A. The state pays the vendor an incremental amount on
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the contract that is less than the difference between
the amount the state was paying for energy prior to
entering into the contract, and what the state is
paying for the energy after entering into the
contract.
B. The vendor pays a specified sum at the outset of
the contract to provide its services, in exchange for
the state paying the vendor an incremental amount
equal to the difference between what the state was
paying for energy for a facility prior or facilities
to execution of the contract and for the same energy
afterwards, for the life of the contract.
3. Requires DGS to issue a non-mandatory master services
agreement (MSA) permitting owners, operators, and
tenants of state facilities to procure a wide range of
energy efficiency products or services from the approved
companies included in the agreement.
4. Specifies that the companies included in the agreement
shall have a record of providing those products or
services to governmental entities or private sector
companies for at least two years prior to January 1,
2012.
5. Directs DGS to begin working with relevant university
centers no later than January 1, 2013, for guidance in
the development of product and service specifications
for the non-mandatory MSA.
6. States that the non-mandatory MSA shall include
provisions to authorize pilot or demonstration contracts
for energy efficiency products or services.
7. Clarifies that this energy efficiency contract program
shall not be construed to do any of the following:
A. Limit the ability of DGS to determine a vendor is
in breach of contract.
B. Prevent the state from requiring other terms or
conditions, as long as the terms do not frustrate the
purposes of this bill.
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C. Prevent DGS from reasonably apportioning
administrative or consulting costs required to
implement the contracting methods set forth in this
bill to ensure that that the state does not lose the
opportunity to achieve energy savings and DGS is able
to be fully reimbursed for those reasonable costs
exclusively from savings.
D. Require creation of a General Fund obligation.
Background
The Green Building Executive Order (S-20-04) directs state
agencies to reduce energy usage 20 percent by 2015 by
retrofitting, building and operating energy and resource
efficient buildings. Although DGS has audited and
retrofitted approximately 25 state buildings pursuant to
this Order, attempts to thereby reduce energy usage in
state owned or leased buildings have not been fully
accomplished. As a matter of fact, state energy usage has
gone up since the issuance of the Order in 2004.
Prior Legislation
SB 954 (Figueroa), Chapter 556, Statutes of 2005, requires
DGS to standardize the operational responsibilities for
information technology procurement, and to establish and
publish policies regarding the purchase of information
technology products and services.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13 2013-14 Fund
New energy efficiency
contract bidding procedure
- issuance of master Minimum $250 one time; up
to Special*
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services agreement $125 ongoing
- pilot or demonstration $125 or more
annuallySpecial*
contracts
* Service Revolving Fund (a cost recovery fund operated
by the department)
SUPPORT : (Verified 5/31/11)
California League of Conservation Voters
Environment California
Scientific Conservation, Inc.
ARGUMENTS IN SUPPORT : The author notes that, "despite
the fact that energy efficiency is a high priority for the
State of California, and that state departments have been
directed to do everything they can to save energy and
energy costs, the Department of General Services has not
entered into one of these contracts, despite attempts to do
so. This is because DGS contracting is not set up for
these types of contract vehicles?This bill will permit the
state to enjoy the savings from such services without risk
of non-performance costing the state money and making
significant upfront capital commitments."
PQ:kc 5/31/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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